When Jeff Bezos founded Amazon as an online bookstore in the mid-1990s, he did so with a clear vision for how he wanted to manage the enterprise. “We believe that a fundamental measure of our success will be the shareholder value we create over the long term,” he wrote to shareholders in 1997. “This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.”
In the 20 years that followed, Bezos steadfastly maintained that long-term focus, reinvesting profits to build capacity, turning that capacity into new and innovative business lines, and reinvesting the profits from those business lines to build increased capacity and new capabilities – again, and again, and again. Amazon not only leads markets, but also creates them. What started as an online bookstore is now in the business of (among other things) television and movie production, online storage and servers, warehouse robotic systems, drones, tablets and mobile devices, online reference services, and is the first place most people turn to when shopping online for anything. Bezos is now one of the wealthiest individuals in the world, with an estimated net worth of $72 billion as of October 2016, and Amazon’s current market capitalization is over $386 billion.
Bezos is among a small group of public company CEOs who have been able to maintain a long-term focus while running their businesses. There’s nothing fundamentally unique about their markets or industries that allows them to focus so strongly on the long-term – but new research from Russell Reynolds Associates shows that there is increasing evidence that there is something unique about the CEOs themselves. And, for organizations lucky enough to be led by one of these unique leaders, there’s a clear role to play for boards of directors who want to assess, recruit, and enable them – and reap the value they create for stakeholders over the long-term.